A 6-Year Accumulation Bond with Face Value $10,000 and Redemption

question 23

Multiple Choice

A 6-year accumulation bond with face value $10,000 and redemption value $10,150,reinvests the semi-annual coupons in the bond and pays the accumulated value of them out upon redemption,along with the redemption value.The bond pays interest at j₂ = 4%.What is the price to yield j₂ = 5%?

• A)$7735.69
• B)$9430.09
• C)$9541.62
• D)$9598.65

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Definitions:

Implicit Assumption

An unstated premise or belief that underlies an argument or reasoning.

Begging the Question

A logical fallacy where an argument's premise assumes the truth of the conclusion instead of supporting it.

Proposition

A statement or assertion that expresses a judgment or opinion, capable of being true or false.

Begging the Question

A logical fallacy where the conclusion of an argument is assumed in the premise, often leading to a circular argument.